Nothing will tank an airline's PR vibe quite like abruptly canceling 40 flights, losing its right to fly and then having the founder taken into custody.
Launching in December 2022, a new carrier called MYAirline had been running flights within Malaysia for almost a year when it suddenly announced that it was stopping all service and canceled more than 40 flights on Oct. 12.
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The airline said that deals to find financing had fallen through at the last minute but, as none of this was mentioned during an earlier audit in June 2023, the Civil Aviation Authority of Malaysia (CAAM) suspended MYAirline's Air Operators Certificate (AOC) for 90 days to investigate what exactly went wrong.
'A four-day remand to assist with investigations,' local police says of beleaguered airline founder
In announcing its decision, the governing body said that the ability to "provide evidence indicating financial solvency" is an integral part of the "airline's safety audit." The incident, CAAM said, also "raises serious concern on public safety and the overall integrity of civil aviation operations in Malaysia."
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On Oct. 18 and a few days after the investigation began, Malaysian police arrested MYAirline founder Goh Hwan Hu alongside his wife Neow Ean Lee and adult son Goh Tze Han on suspicion of violating the country's anti-money laundering and anti-terrorism financing laws.
"Police have obtained a four-day remand from Wednesday for them to assist investigations under the anti-money laundering, anti-terrorism financing and proceeds of unlawful activities act 2001," Ramli Mohamed Yoosuf, who leads the local police's commercial crime investigation department, said in a statement to Agence France-Presse.
In the days after the arrest, Malaysian authorities also started detaining those who may be able to assist in the investigation. A man in his 40s who was a shareholder of the airline was met by police at his home in the Kuala Lumpur suburb of Bangsar and is currently being questioned under the same anti-money laundering and anti-terrorism financing law.
What exactly went wrong with MYAirline? Here's all you need to know
"All individuals who invested in businesses involving the airline company co-founder have been told to lodge police reports and assist in the investigation,” Yoosuf said in a further statement.
One of the collapsed airline's former board members, Raynor Teo, is the CEO of Trillion Cove Holdings — a Malaysian investment company that is currently embroiled in its own money laundering scandal.
MYAirline had formerly issued a statement saying that it had "worked tirelessly to explore various partnership and capital-raising options to prevent this suspension" but had no other alternative but to suspend the flights due to "the constraints of time."
In statements to local media, it also said that it would only be able to refund passengers "once new investors come in."
Along with the thousands of passengers who were left stranded in different parts of Malaysia without a flight, the financial troubles were what caught the attention of investigators.
Prior to the suspension and the arrests, MYAirline was expanding fast and already talking of moving beyond Malaysia with flights to nearby countries such as Singapore, Thailand and Vietnam by the end of 2023.
